Third licensing round contracts to be signed in early 2017
Contracts for the third licensing round in Cyprus’ exclusive economic zone (EEZ) will be signed in early 2017, Energy Minister Yiorgos Lakkotrypis said on Monday speaking at the House Finance Committee.
The Minister said he expected to receive the relevant reports in the next few weeks and submit them to the Cabinet. After that, the Ministry will embark on negotiations with the bidders.
Lakkotrypis noted the participation of consortia, such as Exxon Mobil and Qatar Petroleum, or ENI and Total as an indication of Cyprus’ EEZ prospects. According to the Minister, a drilling scheduled to take place in 2017 at EEZ block 11 was also very important, since the rock formation is similar to Zhor’s, the giant gas field off Egypt’s shore. Beyond talks with Total, the government is also in consultation with ENI regarding the company’s drilling.
Replying to MPs’ questions, Lakkotrypis said that there is no relation between the development of hydrocarbons and ongoing settlement talks for a Cyprus solution. During the session, the Minister also said that no technical reports were conducted over the transportation of natural gas to Turkey.
Following a failed attempt for a deal to supply Cyprus with natural gas until domestic sources were developed, the Minister said that the Natural Gas Public Company (DEFA) was instructed to prepare a report for LNG import infrastructure.
Elaborating on the Ministry’s hydrocarbon strategy, Lakkotrypis said it was focused on additional discoveries in the EEZ, involving Total and ENI, and the development of the “Aphrodite” gas field, with the pipeline option to Egypt being the most advantageous. He added that falling fuel prices are a matter of discussion with the companies licensed to develop “Aphrodite” and the Egyptian government.
Concerning the “EastMed” underwater pipeline for the transportation of natural gas between Cyprus, Israel and Egypt, the Minister said the project was feasible, with an estimated cost of 5-6 bln euros. It continued, however, to be under evaluation, since the project’s financial viability lies in finding a buyer.
On the underwater electrical cable project, dubbed “Euroasia Interconnector”, the Minister said that the project promoter submitted a business plan to all three countries involved - Cyprus, Greece and Israel - and awaits approval.
Lakkotrypis added that an integrated casino resort is expected to be ready by 2020 and until then, a provisional casino will be set up in Limassol, along with four “satellite casinos” in the other Districts. The biggest of the four will be in Nicosia.
This is an investment of over half a billion euros during the first stage, that will provide employment to 4,000 people during and after construction, while attracting 300,000 additional tourists, Lakkotrypis said and expressed hope that licenses will be signed before the end of the year.
The Minister further said that the creation of an Undersecretariat for Tourism would be a positive development, allocating to the industry the attention it deserves. The new office will report directly to the President.
Despite Brexit, tourism prospects from the British market seemed favourable, Lakkotrypis added, noting however that per capita spending was expected to fall.
Finally, Lakkotrypis said opening the electricity market to competition is one of his Ministry’s top priorities, while relevant regulations are at the final stages of approval. By the end of the month, the Minister said, he would propose an interim solution for 2019-2020, in cooperation with Cyprus’ Energy Regulatory Authority (CERA).
A tender for the creation of a technology park in Pentakomo has attracted no investor interest so far, with Lakkotrypis noting that the deadline was extended until mid-December.